Chesswood Income Fund

Chesswood Income Fund

November 13, 2008 15:15 ET

Chesswood Income Fund Announces Results for Q3 2008

TORONTO, ONTARIO--(Marketwire - Nov. 13, 2008) - Chesswood Income Fund (the "Fund") (TSX:CHW.UN) announced today its results for the third quarter and nine-months ended September 30, 2008.

"While our largest business, Pawnee Leasing Corporation, continues to operate profitably, increased delinquency and charge-off levels persist." said Barry Shafran, CEO of the Fund. "Notwithstanding these levels, we received a record volume of new lease applications in the quarter, as more traditional credit sources continued to tighten and several of our more recent lower-priced competitors announced their retreat from our market." added Shafran.

The Fund's methodology for calculating distributable cash, which is based on the earnings of its subsidiaries that can be distributed up to the Fund, is subject to the terms of credit facilities which permit distributions based on net income determined in accordance with GAAP. In this third quarter, as in the first two quarters of 2008, Pawnee's increased allowance for bad debts, a non-cash item, resulted in Pawnee's cash flows being significantly higher than the amounts it could distribute to the Fund. While the Fund paid distributions of $774,000 in the quarter for a payout ratio of approximately 96%, $1.5 million of lease financing at Pawnee was also repaid during the three-months ended September 30, 2008, resulting in a further reduction in leverage, from the second quarter.

Financial Highlights For The Fund
(in CDN $000's, except Per Unit Amounts)

For The Three Months For The Nine Months
Ended September 30 Ended September 30
2008 2007 2008 2007

Revenues $19,717 $21,840 $65,945 $65,930

Adjusted EBITDA $1,062 $2,657 $2,951 $9,067

Distributable Cash $810 $2,246 $2,407 $7,025

Distributions(1) $774 $2,220 $3,211 $6,960

Income before Non-controlling
Interest, Unrealized foreign
exchange and swap
gains/losses and
Goodwill Impairment $718 $2,271 $2,059 $7,522

Goodwill Impairment - ($10,512) ($14,823) ($10,512)

Net Income (Loss) $63 ($6,742) ($11,706) ($1,121)

(1) - includes dividends on 1,478,537 Class B and C shares of Chesswood
US Acquisition Co Ltd. and distributions on 7,040,558 Fund units.

Non GAAP Measures

References to Adjusted EBITDA and Distributable Cash are not recognized measures under Canadian GAAP and do not have standard meanings under Canadian GAAP. Accordingly, these measures may not be comparable to similar measures presented by other issuers.

Please refer to Chesswood's Management Discussion and Analysis for the three and nine months ended September 30, 2008 for additional information concerning these measures and a reconciliation of these measures to the Fund's consolidated net income for the period.

About Chesswood Income Fund

The Fund is a financial services trust with operating businesses in both Canada and the U.S.

For more information visit

This press release contains forward-looking statements that involve a number of risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.


Contact Information